Commerce's First Regional Revolving Loan Fund Pilot Provides $1.1 Million to Northwest Wisconsin Businesses
"A new northern Wisconsin revolving loan fund is spurring private investment, creating jobs and setting a great example of how to successfully grow the Wisconsin economy," State Senator Bob Jauch (D. Poplar) said recently when he praised a Department of Commerce (Commerce) initiative that has resulted in revolving loan funds from seven northern counties joining together to form the Northwest Wisconsin Economic Development Fund (NWREDF). In its first three months, the NWREDF awarded $1.1 million in loans to 10 northern Wisconsin businesses in the region. See below for full details. Jauch, addressing the annual meeting of the Northwest Regional Planning and Development Commission (NWRPDC), noted that Commerce's efforts to consolidate local revolving loan funds into a single, larger fund in order to put money to immediate use in expanding businesses in Wisconsin communities is cause for celebration.
Loans Approved (as of June 28, 2006)
|Diamond of Mercer d/b/a Snow's Family Foods – Iron County
|Norse Building Systems, Inc. – Rusk County
|Mercer Lumber Company – Iron County
|Jason Gillis d/b/a Flambeau Adventures – Rusk County
|Northwest Sanitary Inc.– Sawyer County
|Kleiss Gears, Inc. – Burnett County
|Northbound Business Ventures d/b/a Webster Ace Hardware – Burnett County
|Park Falls Hardwoods – Price County
|Jims Meat Market – Bayfield County
|Second Street Market – Sawyer County
"We are celebrating this moment because of strong state, local and private partnership that will help us grow our economy and strengthen our community development efforts across the region," said Jauch.
Commerce launched the new initiative in late 2005 as a pilot program to encourage the voluntary consolidation of local community business revolving loan funds. Governor Doyle announced the project six months ago as part of his Grow Wisconsin plan to illustrate how regionalizing dormant local funds results in job creation. Currently, there are over 200 local revolving loan funds with approximately $30 million not being utilized. That was great news for Rod Kleiss, President of Kleiss Gears, Inc. in Grantsburg.
"The loan is critical to our growth," says Kleiss. "The precision inspection machinery that we will purchase is expensive and unique. In providing this loan, the State of Wisconsin is helping us prepare for significant growth, which in turn will help our community. I am still overwhelmed at the level of support Wisconsin offers the business community."
Some of the many advantages afforded by this initiative include encouraging local governments to work together toward shared economic development goals, increasing and streamlining management capacity, and creating a more flexible fund by providing resources targeted not only to traditional business development, but to downtown revitalization, entrepreneurship and technology development.
Douglas Finn, chair of NWREDF, says that "The Regional Economic Development Fund will allow for a larger pool of funding, which will allow more flexibility for businesses that are seeking to expand or relocate their businesses in our area. There has already been a significant amount of activity and interest in the REDF, which demonstrates (that) by creating partnerships in northwestern Wisconsin and accepting change, businesses will be able to grow and jobs will be created." One of those growing businesses is Norse Building Systems, Inc. of Ladysmith.
Commerce Revolving Loan Fund Manager Amy Young Cumblad, Sen. Bob Jauch, Rep. Gary Sherman and representatives from the businesses in northwestern Wisconsin that received loans from the newly-established Regional Revolving Loan Fund pose for a group photo at the annual meeting of the Northwest Regional Planning Commission in late June.
Peter Stalland, President of Norse Building Systems, Inc, says, "The recent $350,000 loan from the Northwest Planning Commission has helped us tremendously with our operating capital needs this (past) spring. NWRPC in concert with the Wisconsin Department of Commerce has been a wonderful financial partner in our business since we started in 1997. We have built over 1,700 custom, high quality modular homes throughout the Midwest during the last nine years and have sustained an employee base averaging 100 jobs in Ladysmith. We appreciate the flexibility and support."
Governor Doyle's Grow Wisconsin Plan charges Commerce with developing regional strategies to catalyze more effective economic growth and vitality. In addition, with ever-shrinking resources, Commerce as well as local governments must find creative and cooperative ways to work smarter and better. The revolving loan funds are an example of one successful new step in that direction.
To learn more about regional RLFs, contact Amy Young Cumblad at 608/266-2688 or email her at firstname.lastname@example.org.
Regional Revolving Loan Fund Recipients
Diamond of Mercer d/b/a Snow's Family Market - Town of Mercer - Iron County $100,000
The project includes a 11,244 sq. ft. expansion of this family-owned grocery store including adding an in-store bakery, hot deli, walk-in cooler, and space for a pharmacy. The project also includes the construction of a one stall carwash on property adjacent to the grocery store site. The project will create ten additional jobs and leverage $1,713,977 of private and other public funds. Business Owners Randy and Nancy Snow
Northwest Sanitary, Inc. - Town of Radisson - Sawyer County - $50,000
The proposed project includes the purchase and expansion of the former Gene's Sanitary Service by Ronald and Kristian Vieceli. The project will retain four existing positions and create one new position. The project will leverage $600,000 of private financing.
Norse Building Systems, Inc. - City of Ladysmith - Rusk County - $350,000
Project includes the injection of short term (1 year) working capital to assist the business in gearing up for the current construction season. Norse, a modular home manufacturer, has been unable to site some of its current inventory of pre-sold homes in the Twin Cities area due to a backlog in the issuance of building permits. This has delayed the business in collecting final payment on these homes, causing a short term cash flow need for the business. The project will help retain 75 full-time employees and create an additional 25 new full-time positions. The project will also leverage $981,000 of private financing. Business Owner Peter Stalland
Kleiss Gears, Inc. - Village of Grantsburg - Burnett County - $100,000
The project includes the expansion of this former Minnesota state of the art plastic gear engineering, design, inspection and manufacturing company. Project financing will be used to purchase state of the art manufacturing equipment to allow the business to grow its high-tech gear manufacturing business with the U.S. Department of Defense and medical device companies, among others. The project will help retain six existing full-time positions and create four additional full-time positions. The project will leverage an additional $526,500 of private and other public financing. Business owners Rod and Georgianne Kleiss
Jim's Meat Market, LLC - Town of Iron River - Bayfield County - $100,000
The project consists of the expansion of the business including the construction of a USDA approved processing and retail facility in the newly created Bayfield Electric Industrial Park. The new USDA approved facility along with the purchase of additional equipment will allow the business to market its products outside of the state of Wisconsin. The project will retain three full-time positions plus create an additional five new full time positions. The project will also leverage $617,900 of private financing. Owner Jim Klinge
Park Falls Hardwoods - City Park Falls - Price County - $180,000
Project includes the upgrading of this hardwood sawmill with state of the art debarking equipment along with high-tech sawmill to increase the grade and yield of lumber and wood residue produced by the mill. The increased efficiency is critical to the mill's continued operation in the City of Park Falls as the price of energy to transport logs from Michigan's Upper Peninsula continues to increase. The upgrading of the Park Falls mill is critical not only to the City of Park Falls but to Superior Kilns, a sister company to Park Falls Hardwoods, located in the City of Mellen, Ashland County. The Park Falls mill supplies a significant amount of its high grade hardwood lumber to Superior Kilns for drying. The project consists of not only the purchasing of equipment but also the purchase of additional land and building, to further expand the business's capacity, ease the business's flow of production, and enhance the plant's safety of operation while cutting down on the emissions of dust and the accumulation of waste at the mill site. The project will retain 54 full-time jobs and create three full-time positions. The project will leverage $1,621,000 in private and other public financing. Business owner Mike Flynn
Mercer Lumber Company, Inc. - Town of Mercer - Iron County - $30,000
Project includes the injection of short term (6 months) working capital into the business. The business will use the funds to purchase inventory for the current construction season. The loan will be paid off at the end of the season. The project will help retain six existing jobs and leverage $40,000 of private funds. Business owner Ed Alvey Jr.
Flambeau Adventures, LLC - Town of Big Falls - Rusk County - $12,000
The project includes the expansion of a canoe and kayak rental and shuttle service business. Project financing will be used to purchase equipment including canoes, canoe trailer, van and auxiliary equipment. The project will help retain one job and leverage $5,610 of private financing. Business owner Jason Gillis.
Webster Ace Hardware - Village of Webster - Burnett County - $108,000
Project includes the refinancing of its current debt financed by an out of state lending institution with a local bank and the injection of additional working capital by NWREDF. The new financing will replace a floating interest rate with a 5-year fixed rate. The business will retain five full-time positions and leverage $467,000 of private financing. Business owner Stefan and Debora Benson
Second Street Market - City of Hayward - Sawyer County - $35,000
Project includes the start-up of an organic and natural foods and other natural products market store in the City of Hayward. Project financing will be used to purchase a site and construct a 1,900 sq. ft. building, purchase store equipment and fixtures and for start-up working capital. The project will create three full-time positions and leverage $237,500 of private funds. Business owners Cynthia Rice, Bailey Beckwith, and Chase Erickson
-- Amanda Buhman